Demonetisation was good: The future generations will thank us for it
In December 2016, eminent thinker and Chartered Accountant Shri S. Gurumurthy compared demonetization with Pokhran Nuclear Tests of 1998. Bajpai government’s nuclear tests in 1998 attracted criticism of opposition parties led by Indian National Congress. Pokhran-II also attracted international sanctions from countries like United States, Japan and many more. Today India is considered a military superpower due to the nuclear tests that were conducted by NDA in 1998. It not only brought a much needed stability in Asia-Pacific region but also established India as a global player in geo-political matters. There was short term pain resulting in long term benefits.
Can we expect the same from a bold and progressive move like demonetization from Modi government? The data post-demonetization revel that most of the demonetized currency notes came back to the reserve bank. Does it mean DeMO failed? Of course not, the government post DeMo identified 18 lakh depositors and inquiries were ordered. The number of income tax returns filed in 2018 rose to 6.86 crores from 3.8 crores in 2014. The income tax collections from 6.38 lakh crores in 2014 rose to 10.02 lakh crores in 2018. When GST was introduced in 2017, the number of assesses increased to 114.17 lakhs from 66.17 lakhs. For the period April-December 2018, the income tax collection stands at a staggering 8.74 lakh crores registering a rise of 14.1%.
The phenomenal rise in the number of returns filed, income tax collections and GST filling post DeMo clearly suggest that it has successfully influenced people to pay taxes and restrain from black money. This in long run will benefit the economy creating a sustainable stream of revenue for the government offsetting the temporary slowdown much criticized by opposition parties.
Professor(Finance Area), Writer, Political Observer, Curious